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Big gain for soybeans after USDA numbers

Soybeans were sharply higher on commercial and technical buying. In the first field-based estimates of the season, the USDA lowered its production, yield, and acreage numbers. Recent rainfall in parts of the Midwest and Plains might have helped stabilize yields or even boost prospects in parts of the region. Old crop ending stocks were up, but new crop was down on the smaller production guess. The new crop carryout is seen at 200 million bushels, with a long way to go in the current marketing year. Globally, the USDA raised 2022/23 production and ending stocks, but did lower the import estimate for China. The USDA says 56% of U.S. soybeans are rated good to excellent, 1% lower than last week, with 97% at the pod setting stage and 22% dropping leaves, both behind their respective fie-year averages. Soybean meal and oil were sharply higher on the strength in beans and the fundamental implications of a smaller U.S. crop. The trade is also monitoring conditions in Argentina and Brazil ahead of widespread planting. Some soybean crush facilities in Brazil have idled because of negative margins. Export inspections were down on the week, but up on the year, primarily to China and Pakistan.

Corn was higher on commercial and technical buying. The USDA cut its outlooks for this year’s crop and yield, while also lowering the acreage estimates. Early yield results have been mixed, much better in some areas than in others, and it’s not uncommon to see the USDA trim expectations before widespread harvest gets underway. Recent rain in the Midwest and Plains is likely too late to make much of a difference for yields in many areas. As of Sunday, 53% of U.S. corn is in good to excellent shape, down 1%, with 95% at the dough making stage, 77% dented, and 25% mature, all slower than normal, with 5% harvested. Old crop U.S. ending stocks were modestly lower, while new crop was down sharply. Further demand rationing is not out of the question. The USDA’s next set of supply, demand, and production numbers is out October 12th. Corn export inspections were below last week, but above last year, with China and Honduras topping the list.

The wheat complex was mostly lower on fund and technical selling. The USDA’s global numbers were bearish, with larger production and ending stocks projections. That included increased production projections for both Russia and Ukraine. Even with that bump up in global ending stocks though, when taking China out of the equation, the world supply should be tighter than it has been in at least a decade. There were no changes to the USDA’s domestic supply and demand tables, aside from taking the average estimated farm price from $9.25 to $9.00 per bushel because of that hike in the global numbers. In the Black Sea region, Ukraine has taken back significant territory from Russia, but fighting is ongoing, impacting planting and harvest, and Russia and Turkey are still expected to meet this week to air out their complaints over the pace of and destinations for Ukraine’s Black Sea exports. France has signed an agreement with Romania to facilitate Ukraine’s exports to developing nations. Weekly export inspections were above both a week ago and a year ago, mostly to Mexico and the Philippines, but the 2022/23 pace continues to trail 2021/22. For U.S. winter wheat, 10% of the crop is planted, compared to 7% on average. For spring wheat, 85% is harvested, compared to the five-year average of 89%.

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